Yahoo Finance Cathay General Bancorp (NASDAQ:CATY) Is Due To Pay A Dividend Of $0.34
Cathay General Bancorp's (NASDAQ:CATY) investors are due to receive a payment of $0.34 per share on 10th of June. This means that the annual payment will be 3.8% of the current stock price, which is in line with the average for the industry.
Check out our latest analysis for Cathay General Bancorp
Cathay General Bancorp's Dividend Forecasted To Be Well Covered By Earnings
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Having distributed dividends for at least 10 years, Cathay General Bancorp has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Cathay General Bancorp's latest earnings report puts its payout ratio at 22%, showing that the company can pay out its dividends comfortably.
EPS is set to fall by 4.6% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 36%, which would be comfortable for the company to continue in the future.
Cathay General Bancorp Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the annual payment back then was $0.04, compared to the most recent full-year payment of $1.36. This works out to be a compound annual growth rate (CAGR) of approximately 42% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
The Dividend Has Growth Potential
The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Cathay General Bancorp has grown earnings per share at 5.9% per year over the past five years. Cathay General Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Cathay General Bancorp's Dividend
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Cathay General Bancorp that investors should take into consideration. Is Cathay General Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
